Two major oil-producing nations could be forced to drastically reduce their crude output in the coming days if a critical Middle Eastern shipping passage stays blocked, according to financial analysts at J.P. Morgan.
Banking experts warned Tuesday that Iraq may need to halt production within approximately three days, while Kuwait could face similar constraints within two weeks. The disruption stems from the ongoing closure of the Strait of Hormuz, a narrow but crucial waterway connecting the Persian Gulf to the Gulf of Oman.
The financial institution projects that blocked access to this strategic passage could eliminate 3.3 million barrels of daily oil production by the eighth day of the current Middle Eastern crisis. Should the blockade continue, analysts estimate losses could grow to 3.8 million barrels daily around day 15, eventually reaching 4.7 million barrels per day by day 18.
This waterway serves as one of the planet’s most important energy transit points, handling approximately 20 percent of worldwide oil and liquefied natural gas shipments.
Two senior Iraqi petroleum officials confirmed to Reuters that their nation would need to slash oil production by more than 3 million barrels daily if tanker vessels cannot safely navigate through the strait to reach loading facilities.
President Donald Trump announced Tuesday that American naval forces stand ready to provide escort services for oil tankers traveling through the waterway if needed.
Meanwhile, Iranian media outlets reported that a high-ranking Revolutionary Guards official declared the strait closed to all traffic, warning that Iran would target any vessel attempting passage.
